By Clara Ferreira-Marques
LONDON Oct 17 London-listed miner Bumi Plc
is pressing ahead with an investigation into alleged
financial irregularities at its Indonesian operations, and will
not recommend an offer to split the group until the inquiry is
at or near completion, it said on Wednesday.
Bumi, one of the world's largest thermal coal exporters,
received a $1.38 billion proposal last week from the Bakrie
family, which co-founded the miner with financier Nat Rothschild
two years ago, that would allow the Indonesian family to exit
their stake and take back the firm's operating assets.
The offer followed the announcement by Bumi of possible
wrongdoing at some of those assets - including part-owned Bumi
Resources, the jewel in the Bakrie crown. The
allegations prompted an independent investigation, being led by
London law firm Macfarlanes, and heightened already strained
relations between Bumi shareholders.
Bumi, which confirmed the board had appointed investment
bank Rothschild to evaluate the offer and advise directors, said
it had not yet formed a view on the Bakrie proposal.
"The board will not make any recommendations regarding the
(Bakrie) proposals until the investigation is appropriately
advanced," Bumi said in a statement.
If executed in full, the proposed "divorce" could leave the
London-listed firm, a shell until the deal with the Bakries in
2010, with no operating assets.
The Bakrie family want to swap their 23.8 percent stake in
Bumi for part of Bumi's shares in Jakarta-listed Bumi Resources,
They would then buy the remainder of Bumi's holding in Bumi
Resources and, in a third step next year, purchase Bumi's
majority stake in another Bumi-owned coal producer, Berau.
Several sources have questioned whether the debt-burdened
Bakrie family can raise the necessary cash, and Wednesday's
statement from Bumi's board said directors would consider both
the value and the "deliverability" of the three proposed deals.
One source familiar with the matter said that while
shareholders supported the first two steps, institutional
investors had told the company they would prefer to keep
85-percent owned Berau, particularly as Bumi would
retain an Indonesian champion in the form of coal tycoon Samin
Tan, chairman and core shareholder.
"It is not on the agenda at the moment," the source said, of
the Bakrie offer to buy Bumi's majority stake in Berau.
Bumi reports its quarterly production numbers on Oct. 31